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The one report that could be a big deal Friday

Data on U.S. oil rigs could be interesting Friday afternoon, if they show another week of increased activity.

Baker Hughes rig data are released at 1 p.m. ET, and they come in a week where oil crossed $51 for the first time since since July 2015. At $50 per barrel, analysts have expected to see a return of some drilling activity, and last week's data showed nine oil rigs were added. That makes a total of just 10 new rigs this year.

"It's going to be a big deal. If there's a jump of double digits, it's going to be significant. Anecdotal reports show there's some activity in the Permian Basin, in particular, where the breakevens are about $35," said John Kilduff, partner with Again Capital.

Oil Drill, oil rig
Andrey Rudakov | Bloomberg | Getty Images

Oil was trading lower Friday morning, with West Texas Intermediate crude futures falling below $50 in a global risk off trade.

Stocks were under pressure Friday morning, after having their first negative day in four on Thursday with the S&P 500 at 2,115. On Friday morning, the S&P sank below the key 2100 level. At the same time, Treasury yields continue to decline across the curve as global bond yields fall. The German 10-year Bund was yielding a record low 0.011 percent Friday morning. The yield on the U.S. 10-year note broke lower to trade just above the lowest levels of the year and was at 1.63 percent Friday.

Traders have been waiting to see if the S&P can break above its all-time high of 2,132, even after last week's disappointing May jobs report. But the tone soured drastically Friday, as traders around the world focused on negative yields, the upcoming Fed meeting next week, and the U.K. vote to exit the euro zone.

Jack Ablin, CIO of BMO Private Bank, said the market is getting pricey and lacks catalysts. "We like commodities and REITs. We've been in the utility dividend companies, but they're expensive now. We maybe downshift to mid-caps, but we're still defensive and we still have cash," he said.

"I'm not sure what it would really take for it to break out. At some point we're going to need something fundamental," he said.

Oil has been a mostly positive factor for stocks this week, and as of Thursday was up about 4 percent week to date even with a decline in West Texas Intermediate crude futures Thursday. WTI futures closed down 1.3 percent at $50.56 per barrel, and were off another 1.7 percent Friday morning.

Oil's drop to about $26 per barrel in February had been a major headwind for stocks when it was in decline.

"It's not in the abyss. We just didn't know earlier in the year how low it would go. It held a systemic risk element. When it turned that corner, we had a lot of risk come out of the market, but at the same time I think on a day-to-day basis, it appears to be serving as a global growth barometer to the extent you have prices trend higher," Ablin said. "That's the big missing ingredient in what we're looking for in these markets. It's growth."

Oil has been getting an added lift lately from disruptions in Nigeria, Canada and elsewhere as well as the decline in U.S. oil drilling. However, for the first time in four months, the government reported this week that oil production actually rose, albeit a slight 10,000 barrels a day. Oil production is down about 800,000 barrels from its peak to recent levels of 8.75 million barrels a day.

If Baker Hughes shows an increase in oil rigs, it would be only the third report showing an addition this year.

As oil production fell in the past year, Baker Hughes reports rig count fell too, now at 325 oil rigs compared to about 1,600 in October 2014.

"The E and P companies are lined up. It's like 'start your engines,'" said Oppenheimer energy analyst Fadel Gheit. "They are tempted. They are not in yet. They are still in line. There's no question in my mind they are a lot closer to the turnaround or the turning point than they were only a few weeks ago."

Gheit said the companies will want to see that prices above $50 are sustainable. Analysts expect some companies can start to resume some drilling at $50, but it will take a price over $60 to bring back most shale drilling.

Harold Hamm, CEO of Continental Resources, told CNBC on Thursday that he now sees oil at $69 to $72 per barrel at year end, up from his prior forecast of $60.

Gheit said Hamm's forecast appears high. "The realistic expectation is going to be $55 to $65. I would not be surprised to see oil prices knocking on $60 [by year end]," he said.

If the industry does start drilling, he said, there's a risk it could begin to add too much oil to a still oversupplied market with high inventories.

"It will be a self-correcting mechanism. In my opinion it will be a circuit-breaker. It's going to be like you don't want to accelerate so much so fast. The market condition will serve as a reminder. Don't push your luck. You're going to create oversupply again," Gheit said. He also said the return of U.S. oil could have more immediate impact on world prices since it is no longer restricted by the oil export ban.